1. F.A. No. 167 of 1938 is by the defendant against a decree by the Civil Judge of Bulandshahr under the Agriculturists' Relief Act. Grounds 1 to 3 of appeal allege that the calculation of the amount due from the defendant to the, plaintiff is incorrect. The plaint set out that the suit was brought on two promissory notes which were in two series of separate transactions. Promissory note No. 1,-dated 24th March 1930 for Rs. 1,00,000, lent to defendant by plaintiff's firm at the rate of 12 annas per cent, per mensem with compound interest at six-monthly rests. Promissory note No. 2 of 14th March 1933 for Rs. 1,29,900-5-0, that is, the total due on No. 1, the rate of interest specified only as 12 annas per cent, per mensem, that is, this was at simple interest. No. 3, a promissory note of 6th March 1936 for Rs. 1,54,714 in lieu of No. 2. This was also specified with 12 annas per cent, per mensem, that is, simple interest. This was one of the notes in suit. Promissory note No. 4 of 7th October 1933 for Rs. 90,000 at 12 annas per cent, per mensem, also simple. Promissory note No. 5 of 13th September 1936 for Rs. 1,11,560 in lieu of No. 4 at 12 annas per cent, per mensem, which was simple. The suit therefore was brought for the total of promissory notes Nos. 3 and 5 which amounted to Rs. 2,97,033-6-6. The defendant admitted the execution of the promissory notes and the receipt of consideration in the written statement on p. 19 but he pleaded the benefit of the Agriculturists' Relief Act. The claims put forward were under Section 30 for reduction of interest, and for instalments.
2. The particular point raised in the first three grounds of appeal is in regard to the calculation of interest. Now a table was supplied by the defendant-appellant on pp. 25 and 26 and in this table he calculated on promissory note No. 1 of 24th March 1930 compound interest. The Court below has however applied a higher rate of simple interest for the whole period of the transactions. The appellant claims that the Court below was not entitled under Section 30 and Schedule 3 to apply simple interest to transaction No. 1 because that was on a promissory note for compound interest. There is no provision in Section 30 which entitles a Court to change compound interest into simple interest. On the contrary the table in Sch. 3 shows for loans different rates according as the interest is compound or simple. The promissory note comes in the column of Unsecured Loans and being compound interest the rate should be X + 2 1/2, and under note (a) X is 4 1/2 per cent. 4 1/2 + 2 1/2 is 7 per cent, and this is the calculation which the defendant has made on p. 25. On the other hand the lower Court has given him X + 4 1/2 that is 4 1/2 + 4 1/2 or 9 per cent, taking this as simple interest. We have not been shown that there is any authority for this action of the Court below. We therefore allow the appeal of the defendant on this point and we hold that the calculation in regard to promissory note 1 should be at the rate of 7 per cent, per annum compound interest with yearly rests. The calculation on p. 25 is only for the period of promissory note No. 1. We therefore allow the appeal for the amount of Rs. 4402-8-11. The fourth ground of appeal is that the number of instalments should be increased. There were 20 instalments of six months each, which cover a period of ten years. This matter of instalments is one of discretion and the Court below has exercised its discretion. We do not think that we should alter the number of instalments as sufficient reason has not been shown to us. We therefore allow the appeal to the extent Indicated of Rs. 4402-8-11, with costs, as the defendant has succeeded on his main point.
3. F.A. No. 159 of 1938 is by the plaintiff against the decree of the Civil Judge of Bulandshahr in this, a suit on two promissory notes. The first ground of appeal was in regard to a list of property which was decreed as the property charged under Section 3(2), Agriculturists Relief Act. The table in question forms part of the decree and a note on p. 35 shows that the value of the property has been taken at 33 times the annual nett profits. We consider that 33 years' purchase is much too high a rate of valuation. An additional list of property has been filed by the defendant which forms part of this judgment. It shows five more villages out of those appearing on pp. 29 and 30 and the nett profits of these five villages amount to Rs. 7524-2-0. Adding this to the nett profits of the villages in the list decreed which was Rs. 9670-9-0 we get a total of Rs. 17,194-11-0. Sixteen times this annual nett profit will attain approximately to the amount of the decree and we think that 16 years' purchase is quite a fair rate. Accordingly we allow the appeal on this point and direct that these five villages shall be added to the schedule of property in the decree charged with this liability under Section 3(2), Agriculturists' Relief Act.
4. The third ground of appeal is that the slower Court should have granted at least 3 1/4 per cent, interest pendente lite and in future. The lower Court has actually granted 3 per cent. Under Section 4 it is provided that future interest should not exceed a certain rate, namely the rate which may be notified as the rate at which the Government of India will lend money to the Local Government. Learned counsel refers to certain commentaries which allege that on 7th January 1936 a rate was fixed of 3 1/4 with effect from 15th January 1936. The decree of the Court below was dated 16th February 1938 which was about two years after this order, and learned Counsel has failed to show by an inquiry from the Accountant-General that the rate of 3 1/4 per cent, was the current rate at the time of the decree. In any case the provision in Section 4 is that the rate granted for future interest should not exceed the rate provided under that Section. It is not stated in the Section that the rate should attain to the rate at which the Government of India will lend money to the Local Government. The Court below has a discretion in this matter and we see no reason to interfere with its discretion.
5. The fourth ground is that the appellants were entitled to future interest from the date of the decree on the consolidated amount of principal and interest on that date. No authority is shown for this view. The language of Section 30 is that interest is to be paid on the loan and that this interest is not to be higher than the rate in Sch. 3. The whole principle of this Act is that transactions should be reopened between debtor and creditor even in the case of Sec. 30(2) where the transactions have terminated in a decree. It would be quite anomalous to hold that the Court in passing its own decree under the Agriculturists' Relief Act should consolidate the interest and the principal and grant future interest on the whole amount. There is no ruling which lays this principle down and on the contrary the interpretation which has been placed by the Full Bench of this Court in Raghubir Singh v. Mulchand : AIR1937All598 on a case falling under Section 30(2) is against the contention. Although that was a case of a decree, yet Sub-section (2) states that the provisions of Sub-section (1) are to be applied. If therefore the provisions of Sub-section (2) involve the provisions of Sub-section (1) the interpretation of Sub-section (2) is the interpretation of Sub-section (1). We have examined the paper book of the above First Appeal, from order, No. Raghubir Singh v. Mulchand : AIR1937All598 . This paper book shows that what was brought in revision was a decree of the Subordinate Judge of Meerut dated 24th August 1935 under the Agriculturists' Relief Act in which there had been a calculation on the aggregate amount due on 31st December 1929. Now the order which was ultimately passed by the Divisional Bench was a direction that in assessing the amount of interest due the interest will be calculated upon the original amount advanced on loan. 'When that order is applied to the decree under revision it will result that even for the period after the decree the interest is to be granted on the original loan. It was also a case of a decree by instalments. We see no reason to differ from the view which was taken in that case. Accordingly we hold that the principle on which the Court below has acted is correct, that is, that the Court was correct in stating in its decree on p. 33, line 17 that the rate of 3 per cent, per annum should be on the principal amounts of the loan.
6. The fifth ground was that the number of instalments was too large. The instalments were 20 in number of six months each for a period of 10 years. As already observed this was a matter of discretion for the Court below and we see no reason to interfere with that direction. In the result we dismiss this appeal with the exception of ground 1 in which we have accepted the additional five villages for the property which is to be charged with the decretal amount. We decree accordingly, and as the appeal has virtually failed we grant the respondent costs of the appeal.